The main source of revenue for these platforms is advertising. These platforms have developed advanced advertising technologies that allow them to show targeted ads to specific audiences. This is attractive to advertisers as it allows them to spend their marketing budgets more efficiently and advertise in a more targeted way. The success of these ads has led to huge profits for social media platforms.
Yet there are indications that times are changing. There are growing concerns about user privacy and data security. Platforms like Facebook have had several scandals in recent years in which user data was collected and misused inappropriately. This has led to criticism from users and policymakers.
In response, new laws and regulations have been introduced in several countries that protect users’ privacy and restrict the way social media platforms collect and use data. This may lead to more restrictions on the use of data for targeted ads. This, in turn, may lead to a decline in the revenues of these platforms.
Another possible development is the emergence of new paid services on social media. This could be an alternative revenue source for these platforms.
“Twitter Blue”
For example, Twitter already offers a paid service called “Twitter Blue”, which offers additional features to users. Users will then get a blue badge behind their username – a feature that was previously not accessible to everyone but only to the “happy few”, such as celebrities, politicians and companies.
According to Twitter this feature will cost €8/month and will also have other benefits. Twitter Blue members will see fewer or no ads and be able to post longer videos on the platform. Also, tweets from subscribers will be prioritised in the overview and tweets will be able to be edited after posting.
Facebook subscription service
Facebook is currently testing a subscription service that will allow users to access exclusive content from their favourite creators. Facebook is struggling with declining ad revenues and hopes to generate a new income stream with this. After all, the subscription cost would be €11/month per user. However, it is still uncertain whether this will be effectively rolled out.
Meta verified
What did get rolled out and up and running is “Meta verified”. This badge shows, just like on Twitter, that creators and other professional users have been verified. Thus, their followers are sure of the identity of creators. One of the main advantages is that there is active impersonation monitoring for these accounts, which protects them from being hacked. In addition, badge owners can also use exclusive stickers in their Instagram stories.
A secure social media experience
There is also evidence that users are willing to pay for a better and safer social media experience. This is especially true among younger users who value privacy and security more. A survey by CivicScience found that 49% of respondents aged between 18 and 24 would be willing to pay for an ad-free social media experience.
Taking out a paid subscription protects users from online identity theft, something that is unfortunately happening more and more.
The future
Twitter and Facebook will never become fully paid in the near future, though there will be paid features in the form of subscriptions on the platform. An important evolution to keep an eye on.